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Teaching International Monetary Economics. Two different views

Author

Listed:
  • Luca Fantacci
  • Lucio Gobbi
  • Stefano Lucarelli

Abstract

This paper presents a critical analysis of the way in which international monetary economics is normally taught. The objective of this paper is twofold. On the one hand, we show how the most popular international economics manuals deal with exchange rate theory and its link with balance of payments equilibrium. In particular, we stress how the models proposed in these manuals cannot explain one of the biggest macroeconomic problems of our time, that of the imbalances of the balance of payments. On the other hand, we put forward an alternative Keynesian model. Assuming neither full employment nor balanced trade over the short or long run, the paper is intended as a new contribution to the post-Keynesian analysis of exchange rate theory. Finally, our model gives an original insight into the relationship between Liquidity Trap and structural economic imbalances in modern economies.

Suggested Citation

  • Luca Fantacci & Lucio Gobbi & Stefano Lucarelli, 2019. "Teaching International Monetary Economics. Two different views," DEM Working Papers 2019/7, Department of Economics and Management.
    • Handle: RePEc:trn:utwprg:2019/07
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    References listed on IDEAS

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    More about this item

    Keywords

    international monetary economics; exchange rate determination; endogenous money; global imbalances; post-Keynesian economics;
    All these keywords.

    JEL classification:

    • A20 - General Economics and Teaching - - Economic Education and Teaching of Economics - - - General
    • B50 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - General
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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